BRADENTON, Fla. — The Bank of New York Mellon will distribute the toll revenues of Florida’s Santa Rosa Bay Bridge Authority to holders of the agency’s defaulted bonds later this month.
Revenues from the reserve account will be used to make partial payments on March 26, the trustee said in a notice late last week.
The authority defaulted on its bonds in July and January.
According to the notice, the bond resolution states that funds in the reserve must be used to pay interest and principal. If funds are insufficient, the revenues must be applied to payments in the order they are due and on a pro-rata basis.
The reserve account now has $2.23 million, which will go toward interest payments that were due July 1. The notice specifies the CUSIP numbers that will be paid.
The trustee did not explain why partial payments were being made at this time. However, a question about that was raised at the authority’s meeting last month.
Several people also suggested that the Bridge Authority should file for bankruptcy so that toll revenues could go to the Florida Department of Transportation.
FDOT funds operations and maintenance on the 3.5-mile Garcon Point toll bridge in northwest Florida, and expects reimbursement after the bonds are paid off.
The authority’s board resumed meeting in December after new members were appointed. No meetings were held for a year before that because most board members resigned after the Securities and Exchange Commission launched an inquiry. The SEC is believed to be investigating the authority’s lack of disclosure practices and audits because no funds were available for operations.
The authority’s next meeting is March 21. An agenda has not been released but the board could begin discussions about restructuring the bonds. The trustee has hired FTI Consulting Inc. as financial advisor to assist with restructuring options.
The Bridge Authority sold $75.5 million of current-interest bonds and $19.4 million of capital appreciation bonds in 1996 to build the span. The bonds were investment grade when they were sold initially. They are now rated D by Fitch Ratings and Standard & Poor’s, and Ca by Moody’s Investors Service.
Traffic on the toll bridge never met forecasts that were projected when the bonds were sold.
The bridge opened in May 1999 and the agency began supplementing toll revenues with funds from reserves in 2002 to make bond payments.